a study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in
quantity demanded. for these consumers, cigarettes have a(n) price elasticity demand. multiple choice elastic inelastic cross-price income effect substitution effect
According to research, the amount sought by addicted smokers decreased by 2% for every 10% rise in cigarette price. Cigarettes have an inelastic price elasticity demand from these customers.
Demand elasticity is defined as % change in demand and % change in price. Demand's price elasticity is equivalent to 2 x 10 = 0.2 if a 10% price rise results in a 2% decrease in demand. Inelastic demand is shown by price elasticity larger than 1.0.
Inelastic demand occurs when there is little change in the quantity demanded as a result of a price adjustment. Demand is elastic if the formula yields an absolute number larger than 1. To put it another way, quantity varies more quickly than price. The demand is inelastic if the value would be less than 1.
